- 10 Dividend Picks For Your Portfolio: Chief Investors
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Retail Earnings and Sales to Improve in Q4: Analyst
- 4 Food Stocks to Stuff in Your Portfolio: Analyst
- S&P at 1050-1200 Trading Range Next Year: Strategist
- Art Cashin: Caution 'Growing' in Financials, Dividend Moves
- 3 Software Stock Picks from Lazard's Senior Analyst
- Investors Bet on a New Year's Rally For eBay
- Why You Should Play the Reflation Trade: Stock Picker
MOST SHARED
- The Executive Job Search
- S&P Stocks Trading at New 52-Week Highs
- Where Do Pardoned Turkeys Go?
- Judge Erases Couple's $525,000 Mortgage Payment
- Activision Prepares to Double Dip on ‘Modern Warfare 2’
- Salvation Army's Kettles Now Credit Card-Ready
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Black Friday: Can Banks Tap the Frenzy, Too?
- Foreign Demand Boosts US 7-Year Treasury Sale
- Oil Friday
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
- AIG, Ex-CEO Greenberg Reach Pact to Settle Disputes
- Bank of America CEO Search May Extend Into 2010
- Steepest Black Friday Discounts, Revealed
- 'Cancer of Fraud' Permeates Health Care System: Critics
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Judge Erases Couple's $525,000 Mortgage Payment
- For Many in US, It Will Be a Scaled-Down Holiday Season
- Where Do Pardoned Turkeys Go?
- Jobless Claims Below 500,000, Durable Orders Slip
RSS FEED
CNBC Stock Blog
Text Size 
Wachovia shares are down Monday on "crisis psychology" -- but hedge fund master Bill Ackman is optimistic.
Ackman, managing principal of Pershing Square, scooped up a 7 percent stake in Wachovia [WB
Loading...
()
], or "about 170 million shares," amid the news that Citigroup [C
Loading...
()
] would buy the troubled financial's banking business.
"We started buying aggressively after the Citi deal was announced," Ackman told CNBC. "What was interesting was citi was buying a subsidiary, but assuming holding company liabilities -- an unusual transaction.
With rules now in effect that boost acquirors' ability to offset losses from bad debts held by other banks, and as a result of the "unusual" structure of the deal, some "very interesting tax attributes" were created -- namely, tax losses that can be carried back or forward.
"We had to sleuth around to figure out what's going on," he said.
And here's what's going on: "Our estimate of [Wachovia] value, on the low side, is $8 per share. Depending on how much cash is in the holding company, that could be a much higher number."
Ackman addressed the intrusion of Wells Fargo [WFC
Loading...
()
], which made its own higher offer for Wachovia -- an offer that was accepted. The counteroffer was a positive development, says Ackman: "It gave us some certainty" on valuation.
__________________________
CNBC Intelligence:
__________________________
A bidding war would be "positive for the market," engendering "hope for banking in America."
And if Wells wins, "We could wind up as shareholders of...a very well-run franchise," said Ackman.
More optimism for financial stocks: Ackman notes that Pershing Square has also invested in AIG [AIG
Loading...
()
] over the last two weeks.
Disclosures:
Disclosure information was not available for Ackman or his fund.
Data is a real-time snapshot *Data is delayed at least 15 minutes